Photo by Dillan K
On March 29, The Economist posted a list of OECD countries by taxes on property as a proportion of GDP. It shows that Canada’s taxes are the second highest, behind the United Kingdom.
States need to levy taxes to obtain revenue without destroying incentives to work or create businesses. High taxes mean less motivation and fewer opportunities, while low taxes mean less revenue for the country. Increasing taxes on income may cause the most talented people to leave the country. One theory says that the rising inequality in incomes is caused by the competition for talent. Jean Baptiste Colbert said that “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”
You can’t avoid land taxes because “you can’t land offshore,” noted The Economist. Canada’s property taxes accounted for 3.5% of the national GDP in 2009. It has increased by 0.1% since previous years, and Canada has always hovered near the top of The Economist’s list. The U.S. is fourth with 3.3% of its GDP, and only the Scandinavian countries and Eastern Europe tend to have low taxes, far from OECD’s average.